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5 Strategies to Help You Win a Bidding War


When 35-year-old Jessica Lené, an AAFMAA SpouseLink Ambassador, and her husband, an Active-Duty Marine, received PCS orders earlier this year to relocate from Stuttgart, Germany, to Camp Lejeune, they both knew this move would be like no other — even though they had previously lived in the Camp Lejeune area.

Due to COVID-19 travel restrictions, they first had to secure an “exception to policy” to travel. Then, cancelled and rescheduled flights added to the confusion. All the while, they were negotiating long-distance and sight-unseen to buy a house in Hampstead, NC, a housing market that’s red hot. Home prices in Hampstead rose 6% last year, and are expected to rise another 5.1% this year.

Low Inventory

“We’re definitely in a ‘seller’s market’ and may be for some time,” says Tiffany Moyer, broker-in-charge at The Oceanaire Realty in Holly Ridge, NC, who worked with the couple. “At certain price points, homes go on the market and they’re sold the same day.”

Housing is in such short supply locally because so many area homes were damaged by Hurricane Florence in 2018 and are in the process of being rebuilt, plus a new battalion is expected at Camp Lejeune in the coming year, which will exacerbate the shortage even more.

In a market like this, you’re probably going to face competition, and possibly a bidding war, so you’ll want to craft your purchase offer carefully. Here are a few tips:

1. Get Pre-Approved

A serious buyer should get pre-approved. It takes just a couple of days. Your lender will request some documents about your income and expenses, and run your numbers through an automated system. They’ll then provide a letter you can share with sellers letting them know you will qualify for a loan up to a certain amount from the lender.

A pre-approval does not guarantee that you’ll get the loan. It can, however, give you more leverage with sellers looking at several offers.

2. Be Ready to Pounce

Although she’d lived in the Camp Lejeune area before, Jessica understood that they were entering a sellers’ market, and they’d have to move fast. Tiffany agreed to work with Jessica and her family long distance. They overnighted a Power of Attorney (POA) to a friend in the area, which allowed them to sign the documents for Jessica and her husband, after they had agreed on a purchase price and closing date. “The POA was only good for a certain number of days, so we had to perfectly time getting it notarized in Germany and shipping it back to North Carolina,” says Jessica. “Due to COVID, ‘overnight shipping’ took 3-4 days, but thankfully it arrived within our tight timeline.”

3. Write a “Love Letter”

A lot of people want their home to go to a family similar to theirs — especially if it’s a transaction between military families. You can appeal to the seller’s emotions with a letter telling them about your family — even including a photo of your kids and pets. “A letter like that can make your offer stand out,” says Tiffany.

4. Use an Escalation Clause

An escalation clause is an addendum that says you’re willing to increase your offer incrementally up to a certain limit when other offers outbid yours. It can be a winning strategy, but it’s important to stay within your budget and be willing to walk away if bidding goes too high. A general rule of thumb is to offer up to 1% above the asking price.

5. Leverage Contingencies

To make your offer more attractive, you can skip certain contingencies, or shorten (or lengthen) their timing. For instance, Jessica and her husband agreed to “rent back” to the seller for a specified time — so the seller would have more time to move her family.

“Having good communication with the seller’s agent is key,” says Jessica. “It’s so important to develop a relationship with them early so you can learn what is most important to (the seller). Some sellers want to move quickly, while others need more time. Knowing their needs helps us structure a strong offer.”

Other contingencies to consider include offering a faster close (if your lender agrees) or letting the seller know you’ll come to the closing with cash to make up the difference if the home appraises for less than your offer, she says.

We’re Here to Help.

If you’re not certain about whether or not it’s the right time to purchase a home, please contact AMS online today or give us a call at (844) 218-6926. An AMS Military Mortgage Advisor will be happy to provide you with an honest and fair comparison of your mortgage options, including a wide range of low-rate and low-cost mortgages designed to meet your needs.

Ensuring our Members obtain the best mortgage possible is our mission.

For more information about how AAFMAA continues supporting the military community during the COVID-19 crisis, visit www.aafmaa.com/COVID19.